General Motors Corp. and the United Auto Workers have agreed on a framework for a retiree health care trust, but are still negotiating financial commitments, people close to the talks said on Friday.

A breakthrough in the negotiations came after a tense, two-day face-off over shifting $50 billion in retiree health care obligations to the union through a voluntary employees' beneficiary association, or VEBA, that would be funded by GM.

Sources familiar with the talks, however, cautioned a deal can't be finalized until the two sides agree on key aspects of the trust, including the level of funding GM will contribute, where that money will come from and what happens if the fund goes dry or health care costs drop significantly.

Resolving those issues is tied to cutting deals on other significant economic matters, such as wages and GM's investments in U.S. plants, according to sources close to the talks. A sizable, one-time cash bonus for active workers that has been on the table for days also is expected to play into the final deal.

The two sides plan to tackle the remaining issues during weekend bargaining, which was expected to resume Saturday after wrapping up around 9 p.m. on Friday.

"In negotiations, they can get on a single issue and they get enveloped in all the details of that issue -- that's what happened with the VEBA," said labor expert Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass. "It started to unravel for them, then they realized that if there's going to be a settlement, they have to learn to settle on something."

A week has passed since the UAW granted GM an hour-by-hour extension of its contract, which expired just before midnight Sept. 14. After days of morning-until-night bargaining, talks stalled earlier this week on the issue of creating a company-funded, union-run trust to fund retiree health care.

The industry is watching closely as GM works to craft a pattern-setting deal for U.S. automakers. In all, 180,000 active U.S. autoworkers and 400,000 retirees will be covered under UAW contracts with GM, Ford Motor Co. and Chrysler LLC.

Ford and Chrysler have been given indefinite contract extensions while the UAW focuses on GM.

Contract talks between General Motors Corp. and the United Auto Workers resumed this morning, with the two sides preparing for days of tough negotiations ahead.

Talks wrapped up around 9 p.m. on Wednesday, capping a fifth day of bargaining since the contract expired on Friday.

The union and automaker have yet to settle on the linchpin issue of this year's talks: creating a company-funded, union-run trust to pay for retiree health care.

GM and the UAW on Wednesday decided to temporarily set aside talks about the retiree trust fund, known as a voluntary employees' beneficiary association, or VEBA, to focus on other key issues, sources close to the talks said.

The industry is watching closely as GM works to craft a pattern-setting deal for U.S. automakers. In all, 180,000 active U.S. autoworkers and 400,000 retirees will be covered under UAW contracts with GM, Ford Motor Co. and Chrysler LLC.

For now, the union has given GM an hour-by-hour extension on the contract. Ford and Chrysler have been given indefinite contract extensions.

Late Monday in a letter sent to presidents of plant-level union locals, UAW leaders said they may set a formal deadline to the talks.

NEW YORK (Reuters) - General Motors Corp would give new union members 401(k)-style retirement plans instead of traditional pensions for the first time under a proposed United Auto Workers contract, Bloomberg News said on its Web site, citing people with knowledge of the talks.

GM also has proposed freezing cost-of-living raises to help pay for a union-run fund that would take responsibility for retiree health care, the report said.

After breaking off talks at around 9 p.m on Tuesday, GM and UAW negotiators were prepared to return to the bargaining table on Wednesday morning, a person familiar with the talks said.

Spokespeople for GM and UAW were not immediately available for comment.

UAW executives, in a letter to local union presidents and chairpersons dated Monday, said the union and General Motors Corp. have made progress in many areas but still face significant differences.

The memo signed by UAW President Ron Gettelfinger and by Cal Rapson, the lead negotiator for the UAW with GM, also said that the union may be forced to establish a firm deadline with the company.

"We have made progress in many areas of the discussions with GM but there are several major issues separating the parties that must be resolved," said the letter, which was obtained by The Detroit News. "However, we do not take your patience for granted."

The letter warned members against giving credence to so-called leaks, saying it had committed with the automakers to a "media blackout" about the substance of negotiations.

"It is because of your support that your national negotiating team has stayed at the bargaining table in an attempt to make every possible effort on your behalf to reach an agreement without a strike," said the letter, which was signed by 13 executives in all.

The two sides have been working on an hour-by-hour extension since the previous contract expired on Friday. Talks are expected to resume this morning.

Contract talks between General Motors Corp. and the United Auto Workers union will resume later this morning, GM spokesman Dan Flores said.

The two sides talked until around 3 a.m. before agreeing to take a break.

GM and the UAW agreed to extend their labor contract on an hour-by-hour basis. The current labor pact expired on Friday.

Workers were told to report for work as usual today, according to several union locals.

Negotiators from General Motors Corp. and the United Auto Workers tackled a number of hot-button issues Sunday, including the possibility of giving workers cash bonuses to sign off on a deal, sources close to the talks said.

Job guarantees, health care, wages and so-called competitive operating agreements for individual plants were among the unresolved matters as bargaining continued past midnight.

Two days after the contract between GM and the UAW expired and the two sides agreed to extend talks on an hour-by-hour basis, the pace of talks was frustratingly slow, with bargaining going in fits-and-starts, and indications that the two sides are hung up on some issues, people close to negotiations said.

As the UAW and GM work to hammer out what is expected to be a historic and pattern-setting labor contract for Detroit automakers, the central sticking point remains GM's proposal to shift more than $50 billion in retiree health care obligations to a company-financed fund controlled by the UAW, known as a voluntary employees' beneficiary association, or VEBA.

Meanwhile, the threat of a strike seemed to have minimized. Only a few people, mainly local union officers, remained at some of the UAW halls that had been packed with members on Friday and Saturday. Workers calling several strike hotlines Sunday evening were told to report for work today.

"All these issues are interlocking -- what you win in one place might mean you have to sacrifice in another area," said labor expert Harley Shaiken of the University of California-Berkeley. "You've got a lot on the table. For the company, the bottom line is, 'What is their operating cost going to be?' For the union the bottom line is, 'Will they preserve middle-class jobs and will they ensure that retirees are protected?' "

Making the process more arduous is a litany of factors GM and the UAW must consider when weighing each proposal, Shaiken said. GM must ensure that any deal it accepts won't compromise its fledgling and fragile turnaround. The UAW needs a deal it can sell to members who already have made difficult choices, including approving health care concessions in 2005.

As the lead company, or strike target, GM is poised to craft a groundbreaking contract with the UAW that reduces labor costs and closes the competitive gap with the Detroit Big Three's Japanese rivals. In all, 180,000 active U.S. autoworkers and 400,000 retirees will be covered under UAW contracts with GM, Ford and Chrysler. Ford and Chrysler have been given indefinite contract extensions.

GM CEO Rick Wagoner, Ford Motor Co. CEO Alan Mulally and Chrysler CEO Bob Nardelli had a joint phone call Saturday to discuss negotiations. The call was not their first and was described as standard procedure during this stage of negotiations.

VEBA terms a struggle

A signing bonus would not be unusual; the 1999 and 2003 contracts included them.

GM and the UAW are struggling to agree on how to structure a VEBA fund, which also is being sought by Ford and Chrysler.

The two sides generally agree such an arrangement makes sense, but remain divided on safeguards for both sides. The UAW wants GM to promise additional funding in the event prescription drug costs and other medical bills rise faster than projected. GM wants the opportunity to reduce VEBA contributions if, for example, national health care legislation is passed that affects UAW retirees.

Also undecided is how much money GM would contribute. People close to GM have said the automaker is willing to contribute at least 65 cents on every dollar owed for future health care costs. The union wants more.

At odds on job security

While the VEBA is likely to be the core of a new contract, bargaining teams grappled to resolve other issues that will determine how much workers are paid, how GM factories operate and how many U.S. jobs will remain.

The union's key focus has been to stem the loss of U.S. manufacturing jobs, both through plant closures and outsourcing work to non-union labor. GM has been reluctant to agree to demands for job security because it wants to be able to downsize should demand for vehicles fall.

GM is pushing to implement money-saving rules in plants, from getting workers to take on more jobs to outsourcing work not directly related to building vehicles. Such deals are known as competitive operating agreements.

Changing long-accepted work practices is a delicate and politically charged task for automakers and union leaders.

Wages also are a contentious matter. GM is pursuing two-tier pay that would allow the company to pay new hires less than veterans -- an idea traditionally opposed by the UAW.

Both sides keeping mum

Workers and plant-level UAW officials remained mostly in the dark throughout the weekend, as bargainers on both sides were exceptionally tight-lipped about what's going on in the negotiations. Against that backdrop, conflicting reports emerged in the media and among UAW local leaders about whether the talks were progressing or breaking down. One UAW local leader in Texas said he had been told negotiators expected to get an agreement Sunday night, or the union could declare an "impasse."

The lack of information frustrated a number of workers. And some critics of the UAW leadership and the VEBA concept tried to use the silence to stir up opposition to the trust fund idea. A trio of former UAW officials sent a letter to the bargaining team arguing that a VEBA contradicts the union's long-held principles.

Others saw the hushed nature of the talks as a sign that good progress was being made.

Several local union officials said they felt it was best to limit the information until they have a tentative agreement.

In Flint, hundreds of UAW members belonging to Local 598 at the Flint Truck and Bus Plant left a meeting Sunday about the talks with few details, but heard enough to feel good about the progress being made.

"As long as we got UAW behind us, we'll be OK," said retiree Dave Ballard, 64, of Lennon, who left the company in 1997 after 33 years.

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Well, these workers need to be thankful for even getting a retirement plan and indirectly funded health care. That's more than the majority of the nation gets. I also think that if the UAW is concerned about the downtrodden workers, then the UAW should be held accountable for their workers health care. GM will put enough good money in the coffer, but it's up to the UAW to use it wisely and keep it funded through wise investments and union dues. I don't like this "fall back funding" that the UAW has been talking about if the health care plan is in a deficit after GM gives the UAW the money. It just makes me angry when I see the union workers taking their top-rate jobs and benefits for granted.

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Well, these workers need to be thankful for even getting a retirement plan and indirectly funded health care. That's more than the majority of the nation gets. I also think that if the UAW is concerned about the downtrodden workers, then the UAW should be held accountable for their workers health care. GM will put enough good money in the coffer, but it's up to the UAW to use it wisely and keep it funded through wise investments and union dues. I don't like this "fall back funding" that the UAW has been talking about if the health care plan is in a deficit after GM gives the UAW the money. It just makes me angry when I see the union workers taking their top-rate jobs and benefits for granted.

Another person who thinks they know it all. I work at GM. I am not the one at the table with GM. We are as much in the dark as anyone else. I take nothing for granted. If i have to give back to keep my job then so be it. So dont go saying we are the ones taking something for granted when we have not even voted on it or much less even heard anything.

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Another person who thinks they know it all. I work at GM. I am not the one at the table with GM. We are as much in the dark as anyone else. I take nothing for granted. If i have to give back to keep my job then so be it. So dont go saying we are the ones taking something for granted when we have not even voted on it or much less even heard anything.

The UAW has been taking their situation for granted for years. They are living inside a bubble that is NOTHING like the outside world.

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DETROIT (Reuters) - United Auto Workers President Ron Gettelfinger said on Friday that the union's closely watched negotiations with General Motors Corp were "continuing to make progress" and said the union wanted to reach a settlement without striking.

"We are continuing to make progress; however, we are pushing to accelerate the negotiating pace at all levels," Gettelfinger said in an e-mail to local union leaders sent Friday afternoon.

"It is our desire to reach an agreement without a strike, and we have demonstrated this by staying at the bargaining table up to this point."

A copy of Gettelfinger's memo to local union leaders was posted in an update to union-represented GM workers on the Web site of a GM local in Oklahoma. A UAW spokesman was not immediately available for comment.

>>>>>>

it seems to me the title of this article shows that GM isnt being as strong in negociations as anticipated... seeing that UAW is making the progress, not GM...

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The contract was up in Sept 2007, correct? This means that if no new contract is reached, the workers no longer have their jobs, correct? So, what if Ford, GM, and Chrysler all demanded the same thing and the UAW wouldn't give it to any of them. This means that the UAW is, more or less, out of jobs. Behold, the end of the UAW.

Is this a pipe dream or am I on to something here? Sure, it may take a while to get new workers trained (hell, some of the current UAW workers would probably accept their same position... as someone said they work for GM and they don't get to vote, so why not let each and every member negotiate? Why not refuse to give them anything they want, and let the contract expire? If all 3 of the automakers do this, the UAW would fall apart, and all the current UAW workers would be looking for jobs... what better job could they find then something they're already trained for?

This is obviously a best-case scenario, but if the workers wanted their jobs back it could definitely work, and it'd no longer be union jobs. Therefore, no bull&#036;h&#33; to worry about.

Getting rid of the UAW is a fantasy at this point, boys. Besides, if the union did go and wages were cut to the level people want them cut to, there would be bad blood between the work force and GM for decades.

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Getting rid of the UAW is a fantasy at this point, boys. Besides, if the union did go and wages were cut to the level people want them cut to, there would be bad blood between the work force and GM for decades.

Chris

yea its good to let it go slowly, and buy out the remaining employees, every few years...

but in a realistic point, if gm gets the healthcare to be managed by the uaw... then the uaw have vested intrest in the big 3 and have more insentive to see the companies flurish, just as gm would like to see the union flurish.. but when they arent joined together with the same goal in mind, they but heads, and strike and do all kinds of stupid things....

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1. Why in the world does the UAW think that the workers deserve a cash bonus when GM is still struggling? I thought bonuses rewarded prosperity?

2. Why should GM have to pour more money into the health fund after their initial deposit if the fund runs dry? The fund is being run by the UAW, so it should be their responsibility to keep it afloat.